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Common Misconceptions with Bonds

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With the 10 year Treasury yield hitting 3% in April during a steady increase in interest rates to start 2018, we believe taking a look at several common misconceptions investors have with fixed income would be helpful. The article “4 Big Myths About Bonds” by Allan S. Roth on Financial-Planning.com does a great job reframing how an investor should view bonds and their role in a portfolio.

 

Index PerformanceAprilYTD1 Yr
US Stock (Russell 3000)0.38%-0.27%13.05%
Foreign Stock (FTSE AW ex US)1.68%0.53%16.18%
Total US Bond Mkt. (BarCap Aggregate)-0.74%-2.19%-0.32%
Short US Gov. Bonds (BarCap Gov 1-5 Yr)-0.35%-0.74%-0.77%
Municipal Bonds (BarCap 1-10yr Muni)-0.28%-0.98%0.26%
Cash (ICE ML 3Month T-Bill)0.13%0.49%1.17%